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Old 17-12-2018, 00:45   #1
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Almost made it off the wannabees list

Disappointed this morning. Found a boat I really liked, negotiated, had my offer accepted but the current owner can't provide the proof of VAT paid. Talked with HMRC and although they admit that the law is an ass and they can tell that in all probability VAT was paid by the original owner they are not prepared to put that in writing or help in any way at all. My plan is to spend a few years in the Med so not willing to just 'risk it'.....

...so reluctantly had to withdraw my offer..... back to the search...
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Old 17-12-2018, 00:59   #2
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Re: Almost made it off the wannabees list

Disappointing, AND a wise move. Maybe the seller can take the bull by the horns and fix stuff for you.

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Old 17-12-2018, 01:26   #3
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Re: Almost made it off the wannabees list

Where was the first registration of the boat and is there the original invoice to the first owner, was the boat privately owned or in charter when purchased from the factory, is the last owner an EU citizen and is the boat flagged in the EU?

If the boat was purchased and put in charter, chances are, VAT was re-funded, so the Boat is not EU-VAT paid - the seller must invoice you the VAT to the current value when selling the boat and transfer the VAT amount to the tax authorities because the boat is business property. (And than you have an legal invoice that shows, you have paid the VAT)

If the (first) owner is a private person and not a charter company (can be one person charter company subcontracted by a charter agency) and you can get the ORIGINAL invoice (from the factory OR a stamped copy of the original invoice by the bank who has financed the boat indication the VAT paid...), you are all good.

Otherwise you may have to pay up 20% VAT (depending on the country you are in when buying - on your purchase price according to the agreed value. This especially applies when you buy a boat out of charter usage from a charter company / owner under charter contract.

It is always important to know what status the goods you buy are, private owned - VAT paid, no VAT on invoice OR owned by a business (put in charter) than the owner gets the VAT paid RE-FUNDED on purchase and must sell with VAT stated and collected by him to the next owner, also forwarding the VAT to the tax authorities after selling. If you than als use the item for business you can go to the tax authorities and get this paid VAT refunded, when using privately - no refund of course.

Only end user have to pay VAT, businesses only collect and forward VAT to tax authorities and collect re-funds on paid VAT on all items bought for business - so in fact businesses are effectively not paying any VAT.
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Old 17-12-2018, 02:01   #4
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Re: Almost made it off the wannabees list

For cross-border business to business transactions the purchasing company forwards her EU-VAT number to the seller, so instead of adding VAT on the invoice, the seller reports the EU VAT number to the tax authorities and does not collect the VAT. The goods are than imported VAT free within the EU.

As a private person you can also benefit from this by importing the boat and paying the VAT in your country on import on first port of entry instead of paying the local VAT at the production country. If you not intent to sail in EU waters, you can also buy VAT free and let the boat be delivered / exported to Gibraltar, board there and sail away from Europe.
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Old 17-12-2018, 02:03   #5
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Re: Almost made it off the wannabees list

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Originally Posted by ScubaTyke View Post
...so reluctantly had to withdraw my offer..... back to the search...
Had the same problem. I was curious why a 35ft yacht would have 4 fans in the saloon. Then the broker let slip the boat had just come back from Antigua. Instant alarm bells because there was no paperwork including anything for the newish engine that had been fitted. Eventually found a boat with a raft of paperwork and dozens of VAT receipts, one for every stage payment and all the extras etc.

Your other option is to buy an ex charter boat and pay the tax, final price should be about the same as a VAT paid yacht. that way you can be sure that you have the necessary paperwork.

Final option is to buy an older yacht with lots of previous owners.

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Old 17-12-2018, 03:37   #6
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Re: Almost made it off the wannabees list

Bummer.
Irritating when "technikal" requirements re VAT get in the way of owning a good vessel..

sorry bud.
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Old 17-12-2018, 05:54   #7
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pirate Re: Almost made it off the wannabees list

Quote:
Originally Posted by ScubaTyke View Post
Disappointed this morning. Found a boat I really liked, negotiated, had my offer accepted but the current owner can't provide the proof of VAT paid. Talked with HMRC and although they admit that the law is an ass and they can tell that in all probability VAT was paid by the original owner they are not prepared to put that in writing or help in any way at all. My plan is to spend a few years in the Med so not willing to just 'risk it'.....

...so reluctantly had to withdraw my offer..... back to the search...
Any more info like location of boat, flag, nationality of owner and make, year of build.. and how long he has owned it.
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Old 17-12-2018, 06:03   #8
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Re: Almost made it off the wannabees list

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Any more info like location of boat, flag, nationality of owner and make, year of build.. and how long he has owned it.
Sorry, I am not going to post a bunch of details on here about somebody else's boat. The bottom line is there is no way to prove that VAT has been paid although it is clear from the information that I have seen that it has. Doesn't solve the issue.

Feel free to discuss it with me by PM if you like.
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Old 17-12-2018, 06:08   #9
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Re: Almost made it off the wannabees list

Sorry folks, this was simply a bit of a vent. I have spent several weeks going around the problem with HMRC, RYA, a lawyer and an accountant and there is no solution available that doesn't require someone paying VAT (again) for this boat to obtain the bit of paper that has been lost.
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Old 17-12-2018, 06:10   #10
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pirate Re: Almost made it off the wannabees list

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Originally Posted by ScubaTyke View Post
Sorry, I am not going to post a bunch of details on here about somebody else's boat. The bottom line is there is no way to prove that VAT has been paid although it is clear from the information that I have seen that it has. Doesn't solve the issue.

Feel free to discuss it with me by PM if you like.
Fairy Snow mate.. not a big enough deal for me to chase the specifics and you've made a decision so it'd be a waste of time anyway.
Good hunting..
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Old 17-12-2018, 08:18   #11
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Re: Almost made it off the wannabees list

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Originally Posted by CatNewBee View Post
Where was the first registration of the boat and is there the original invoice to the first owner, was the boat privately owned or in charter when purchased from the factory, is the last owner an EU citizen and is the boat flagged in the EU?

If the boat was purchased and put in charter, chances are, VAT was re-funded, so the Boat is not EU-VAT paid - the seller must invoice you the VAT to the current value when selling the boat and transfer the VAT amount to the tax authorities because the boat is business property. (And than you have an legal invoice that shows, you have paid the VAT)

If the (first) owner is a private person and not a charter company (can be one person charter company subcontracted by a charter agency) and you can get the ORIGINAL invoice (from the factory OR a stamped copy of the original invoice by the bank who has financed the boat indication the VAT paid...), you are all good.

Otherwise you may have to pay up 20% VAT (depending on the country you are in when buying - on your purchase price according to the agreed value. This especially applies when you buy a boat out of charter usage from a charter company / owner under charter contract.

It is always important to know what status the goods you buy are, private owned - VAT paid, no VAT on invoice OR owned by a business (put in charter) than the owner gets the VAT paid RE-FUNDED on purchase and must sell with VAT stated and collected by him to the next owner, also forwarding the VAT to the tax authorities after selling. If you than als use the item for business you can go to the tax authorities and get this paid VAT refunded, when using privately - no refund of course.

Only end user have to pay VAT, businesses only collect and forward VAT to tax authorities and collect re-funds on paid VAT on all items bought for business - so in fact businesses are effectively not paying any VAT.
Just reading this and imagining a different world.

One where men did not confiscate the fruits of the labor of other men, at the threat of loss of property or liberty.

One where men helped others not by force but from their hearts.

Read the above reply slowly and consider the shear volume of productive energy that went into writing the VAT (and every well intentioned tax), interpreting and finally attempting to comply.

Imagine if that same energy had been directed elsewhere.

Oh well.
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Old 17-12-2018, 09:15   #12
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Re: Almost made it off the wannabees list

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Originally Posted by akprb View Post
Just reading this and imagining a different world.

One where men did not confiscate the fruits of the labor of other men, at the threat of loss of property or liberty.

One where men helped others not by force but from their hearts.

Read the above reply slowly and consider the shear volume of productive energy that went into writing the VAT (and every well intentioned tax), interpreting and finally attempting to comply.

Imagine if that same energy had been directed elsewhere.

Oh well.
Sounds great. A world where every road is a toll road, every school is private & only the rich can afford an education or health insurance.
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Old 17-12-2018, 11:26   #13
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Re: Almost made it off the wannabees list

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Sounds great. A world where every road is a toll road, every school is private & only the rich can afford an education or health insurance.
Not to mention no public moorages or wharfs, no maintained waterways, no aids to navigation, no marine parks, and fairly fetid water anywhere near where others live. At least we'd be FREE - but it doesn't seem to me like it would be worth it.
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Old 17-12-2018, 13:58   #14
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Re: Almost made it off the wannabees list

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Originally Posted by CatNewBee View Post
Where was the first registration of the boat and is there the original invoice to the first owner, was the boat privately owned or in charter when purchased from the factory, is the last owner an EU citizen and is the boat flagged in the EU?

If the boat was purchased and put in charter, chances are, VAT was re-funded, so the Boat is not EU-VAT paid - the seller must invoice you the VAT to the current value when selling the boat and transfer the VAT amount to the tax authorities because the boat is business property. (And than you have an legal invoice that shows, you have paid the VAT)

If the (first) owner is a private person and not a charter company (can be one person charter company subcontracted by a charter agency) and you can get the ORIGINAL invoice (from the factory OR a stamped copy of the original invoice by the bank who has financed the boat indication the VAT paid...), you are all good.

Otherwise you may have to pay up 20% VAT (depending on the country you are in when buying - on your purchase price according to the agreed value. This especially applies when you buy a boat out of charter usage from a charter company / owner under charter contract.

It is always important to know what status the goods you buy are, private owned - VAT paid, no VAT on invoice OR owned by a business (put in charter) than the owner gets the VAT paid RE-FUNDED on purchase and must sell with VAT stated and collected by him to the next owner, also forwarding the VAT to the tax authorities after selling. If you than als use the item for business you can go to the tax authorities and get this paid VAT refunded, when using privately - no refund of course.

Only end user have to pay VAT, businesses only collect and forward VAT to tax authorities and collect re-funds on paid VAT on all items bought for business - so in fact businesses are effectively not paying any VAT.
If you have to be an international tax lawyer to buy a boat it's killing the fun!
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Old 17-12-2018, 14:46   #15
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Re: Almost made it off the wannabees list

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If you have to be an international tax lawyer to buy a boat it's killing the fun!
If you carry out an international financial transaction of $100K including transfer of registration, taxes, etc without legal advice, you probably deserve any adverse consequences that come your way.
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